Good summary about B&O’s descent

[silou]

https://www.youtube.com/watch?v=LS99sB3hYZ8&t=734s

[Millemissen]

How are those of us who do not speak french supposed to discuss this  video?

What is he supposed to say there? What is the ‘good summary’ of the video?

MM

[NQVHNWI]

Well you can put YT on subtitles and auto-translate. English is certainly available.

Back to the content – which to be frank, I speed read, goes on a bit with the same cliched approach on BNO design, prices and so on and so forth.

It does highlight though how BNOs aspirations are to attract VHNW Individuals (you know the ones where you see YT videos of $10-70million dollar palaces where the BNO products are hidden as well as BNO hide their cables in their marketing guff) and compare the brand to the timeless design, elegance of luxury products Louis Vuitton, Hermes and Rolex etc…

I am guessing that my interpretation of what the Content maker is trying to project is similar to my own view point on the current BNOs marketing strategy to woo and capture the VHNW individuals. That is:-

1. The cheaper on-the-go products (A1s. Headphones etc) don’t make so much money (a few may even lose money – hence the price increases) in a competitive market and for the budget conscious.
2. There is no real stand-out “Burkin Bag” or Classic Rolex Submariner (includes a few Ferrari and Porsche models too) which sells-out so quickly, prices can be arbitrarily increased without protestation, supply and ownership to based on your previous buying history (buying loss-leaders),
3. There is no real stand-out tech that sets BnOs technology way above the competition and therefore can be cited as the go-to products for high fidelity etc…..There can be no better example of this than the BL90 and the BS-Core/Essence. In 2016, the BL90s were perhaps one of the best loudspeakers in the world at the time. IIRC, you could add only the BS-Essence (PL only) or the BS-Core (optical/TOSLINK at best) or a Beovision. PL is utter trash for the 90s. Then it was either a choice of your own ripped FLACs or non-Hi-Res Deezer or Spotify. That stayed like that until a couple of months ago with the introduction of the BC-Core/USB connection to make it a half-interesting fight against the competition. Tidal I guess, is helping a little but try as it might, the BC-Core does not compete with the full-fat black-box streaming products available from 3-parties for years. So that’s 8-years of a flagship world-class loudspeaker that needs other companies products just to make it work properly.
4. All BnO have done in the 8 years the BL90 has been available…….is add a few (expensive) colour-ways and increased the price. Come August 1st, perhaps early 2025, we could well see the BL90s at triple the introduction price (that would be £162k) and filled with the same 9-year old tech and negligible firmware updates to improve the sound to boot.
5. As above. All these swanky gin-palaces with marble surfaces on every wall, ceiling, floor, fine Italian furniture, fine old and contemporary art, a level of ultra-high cabinetmakery in every room, kitchen, bathroom etc….and minimal BnO on display?

I think that selling a “few” more of the flagship products “helps the margin” and adds to the “flat to slightly improving” finances better than the cheaper-end of the product range, but the VHNWI strategy I think is more about reducing losses in the mass-market than becoming a financial giant like LVs parent company LVMH?

Whatever, the first thing BnO have to do is make much much better products to gain a higher level of global appreciation and desirability.

 

 

[Sandyb]

Taking the last few quarters earnings reports into account, not sure “flat to slightly improving” is actually even fair.

Remember earlier this year (and mid way through their financial year) they had to do an out of reporting cycle announcement that full year earnings were likely to fall outside (below) of their previously guided range. Full year earnings are likely to be close to -8% vs the prior financial year.

Profitability and margins look better of course.

Anyways, becoming a lower volume, more niche if higher margin company we know is a risky position to be in, but the vulnerability may not show up fully for a while yet.   The pace of new products though I agree does seem to have slowed somewhat from a few years ago.

[NQVHNWI]

Perhaps a simplification of my rantings above.

Two Swiss Luxury watch manufacturers: Rolex and Omega.

Both open a non-AD but company owned Boutique in the posh bit of Anytownsville.

Both charge full price, no discount.

One requires a good and solid purchase history to be considered for a few “hot” but bland models, one does not.

One brand has Grey Dealers selling (although cooling somewhat now) sell for 1.2-2 times the AD new price for a unworn to seriously worn watch, the other sells new watches discounted at 10-20% straight-off. 20-30% with negotiation and haggling!

Everyone talks of Rolex, nobody about Omega (even though I think Omega make significantly better watches IMHO)

 

B&O wannabe a Rolex of luxury HiFi but are just seen like Omega and realistically, are treated such by Joe Public. VHNWIs do the same unless their Interior Designer tells them differently.

[matteventu]

Trying to propose Bang & Olufsen as the “Rolex” or “Ferrari” of the hi-fi world is literally the dumbest thing B&O leadership could try to do. And, no surprise, it’s exactly what they’re doing.

Without realising how out of touch with the world they are.

They could have done that between the 60-90s.

But trying in 2024 to sell consumer electronics products (because at the end of the day, that is what B&O speakers are) as high-end timeless luxury? Sorry, very few people will buy that.

And, at the same time, also have one of the worst customer support and track record in software development (the app has gone downhill in the last year and a half).

Their red carpet attitude is absolutely unbelievable.

[Stan]

I really don’t know what other choice they have.  The general population doesn’t care about HiFi. I remember when there were hifi stores all over the place.  They’re all gone, except for a handful that mostly do custom installations. How do you do “consumer electronics” when most consumers just don’t care enough to drop big $$$ on it. If you’re going to find a niche, it might as well be VHNWI since that’s where the money is. I’d rather they do this than sell out to Harmon or some other conglomerate (or worse, private equity) who will a) immediate drop support for any old products integration and b) produce watered down badge engineered garbage (like the car audio division). I’m not a VHNWI so I’m not happy about this direction, but again, what choice do they have. I can admire from a far.

Obviously, they should do better with their software, and they’ve probably lost a fair margin of customers who bought a less expensive product and had software issues and cross B&O off their list.  Then again, show me 1 company that does great software. Even Apple is bad now. My wife hates here newer iPhone… glitchy, buggy, etc. Customers have shown companies that they’ll tolerate buggy software by continuing to buy it so software managment say “good enough” far too early. I’d love to stop this, but I don’t know how. If I promised to never buy buggy software, I’d have no software at all!

 

[Millemissen]

@Stan

You are so right!

All that is left is having/buying used (preloved) products.

Luckily one can still make a damn good setup this way……….something that I would not be able to with products from other manufactors.

I am happy now that I bought the Theatre early on – today I probably would not be able to afford it.

MM

[Sandyb]

Given that the Theatre is going up in price on August 1st (by 500/600 euros), I think we’re all glad we bought them early on!

[BeoCom 1401]

Any comparison to Rolex or Hermes is absurd. If the leadership of B&O, on any level whatsoever, believes that their brand can be classified in this category of consumer products they should be removed by the board and shareholders for gross incompetence.

Rolex and Hermes are Veblen goods. Veblen goods increase in desirability as price increases. This cannot and will not ever apply to B&O or any other electronics brand.

Rolex and Hermes do not experience obsolescence. A Submariner works forever. A Birkin bag can last forever.

Bang & Olufsen products do not. Electronics will always get better and people will move on to the next big thing.

B&O needs new leadership or they will end up being acquired by some horrible conglomerate and die at the hands of someone like Samsung, who have well and truly destroyed Harman.

We all love this brand. I hope the shareholders can wise up and demand change. Otherwise the company we all love will die.

[Stan]

Has B&O mgmt actually said they’re trying to be like Rolex/Hermes or is it just commenters on this site? I agree that timeless veblen electronics is wishful thinking.

However, what is their path forward if they don’t go upmarket. HiFi is dead. Long live the bluetooth/ stand alone speaker.

[Mark]

Stan wrote:

However, what is their path forward if they don’t go upmarket. HiFi is dead. Long live the bluetooth/ stand alone speaker.

This is a very interesting and I’m afraid accurate statement.

For most people there is a “good enough” solution for music where the bluetooth and stand-alone speaker fits the need perfectly.  It doesn’t need to be a true stereo system because they are not sitting down listening to music.  How large is the market for a HiFi system?  For me growing up, going to audio stores and looking at the equipment was a lot of fun. Looking for improvements to your system was always a goal.  Music was that important to us.  Even in the upmarket realm, is B&O finding true audio lovers or are they just home decor enthusiasts who love the retro look of the Beosound 9000 and the Beogram 4000c?

 

[michaelmarcos]

This is a very interesting and I’m afraid accurate statement.

Agreed. I was having a discussion on Ducati Forum UK about this: some of our most desirable goals on life are becoming out of date, and losing appeal for the younger generations. In that case I was talking about interest in F1 and Moto GP, but it applies to HiFi, driving license and have a car or bike.

We (our tastes) are on a slow extinction process, the same way horses and carriages lost space to cars.

[Csaba]

michaelmarcos wrote:

We (our tastes) are on a slow extinction process, the same way horses and carriages lost space to cars.

That too is interesting. How do people consume music these days? What kind of listeners are we?

Do we still connect with being a human? Do the things we do and the way we do them make us feel more connected with senses and less digitally connected?

Who buys cameras and proper lenses for stellar money when all you need is your iPhone? And once you use your phone, don’t you feel like Instagram is just flooded with billions of pictures? As if who cares about photographers, camera makers or photographs? Soon you won’t even need to take pictures, only ask your personal secretary (AI) to make a picture for you based on your description.

I don’t take notes in a diary or note book. Never really have. I’m quick at typing. My hand writing used to be nicer. I would love to but haven’t got the time to read books. It’s more of a life stage, but I still like a physical touch of paper rather than an audio book. I read the other day that experts/scientists suggest that we don’t use headphones as our brain works overtime all the time. We are never calm. The brain loves to be bored sometimes. As in no impulses. To give it a rest. But we keep lifting up our mobile phones. For some, headphones are a way of shutting the world out, and with that the disturbences we do not want.

So back to music. What about vinyl? A small customer segment rediscovering it. Cassettes and CDs too. Streaming? Do you ever get lost? It’s a flow and flood of tracks. Do you bother to actively curate your playlists? For me there is an even bigger problem: I simply cannot find all the music I want in one place. The past 25 years I have actively found ways to go farther and deeper into the jungle, finding music I loved, rather than getting some algorhythm-generated recommendation. Then once found, I purchase and download. That’s about as digital as I care to go. But I must be a very rare breed to get by without using a single music streaming service. I personally also like the imperfection of vinyl. The occasion of interacting with a record player. More so than a cassette or a CD. But even a CD gives you a sense of connection with the artist because you can physically flick through the album cover, photos inside and follow lyrics. Without staring at a screen.

So what about listening to music? My girlfriend is a drummer and a very good vocalist deep inside. Strangely she pretty much never desires to listen to music. Radio and news is what she cares about. For me that is beyond comprehension as I crave good quality music and a sense of a specific mood at least every two days. Therefore from time to time I continue looking for new music that speaks to me.

And when I finally do find new music, I get a different problem. I expect in my genres a certain length of time. A minimum length. However, I know that even music producers move on with times changing. They make less and less music with that same length I was used to 20 years ago when I was 20. Nowadays a track in the same/similar genre is 3 minutes and an extended version is 4. Not 7 or 10. I am barely able to start feeling the mood of a track, before it’s over. It never gets to get under my skin. Even if it has got the potential. Is that short length explained simply with our attention span? Our patience to listen to music? Sometimes I feel like I just wakt to listen to music. Sit down in front of a stereo pair of speakers and just listen for 2 hours straight. It can be so personal and immersive. I owe it to music, to the artists, to myself. But again, who does that these days? I admit, if I had one Balance, I’d be happy. Capable enough to fill my space. Give it the beans and it will make you move and get more into listening. Not only in the background. As such, why need a stereo pair? Because you will know once space transforms music into left and right. What have you missed all these years? But again, who cares these days? Music has always been like my best friend in my whole life. It’s important for me. For most, it’s background noise. Ambience. Care to pay for even a Beosound? Let alone a pair of Labs? Let alone an entire surround and multiroom setup? Let alone up there at the future pricing of 50s and 90s?

And if nothing else, people have got other concerns. Like losing their jobs as nobody is irreplaceable (not even Kristian Teär for that matter). Rising food costs. Rising mortgage costs. The cost of ownership of a car. The geopolitical environment. Climate change. People barely want to have kids any more.

[Author]

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